Fortescue, Arrium, BC and Atlas Iron traders will all be holding their breath over the next 24 hours to see if Iron Ore can, finally, prove that the base below $90 tonne is the bottom of this run and higher prices beckon.
After a fall of more than $30 a tonne from January’s highs around $120 to the June low of $88.67, Iron Ore has bounced $8 a tonne as of this morning’s close for a gain of 9%.
But insiders such as Stephen Pearce, Fortescue Metal’s chief financial officer, and Citibank analysts have already turned bullish, expecting prices to run higher as we reported earlier this month.
All that is needed now is for Iron Ore to break through $87 a tonne and close there for a day and traders will dive in, propelling the price higher.
It’s not a done deal.
But it is close as a convergence of fundamentals (closing of low yielding Chinese mines) and technicals (a reverse head and shoulder pattern) combine to suggest the chances of a break higher are the strongest they have been in months.
That would be great news for Australia’s national income.